A verbal agreement she says

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Posted: Mon Aug 16, 2010 12:48 am

OK, so I need a bit of advice here to see what I can expect.

Around late April, I started looking for a new apt. for the next school year. The landlord of the one I was in had intentions of selling and, though she had not found a buyer yet, I didn't want to risk getting thrown out at any time. After all, would the buyer honor the contract?

Anyway, I found a nice place that was rented for $250/month. The landlord gave me the contract and I was to bring it as soon as I had the money to pay for the following months. In the meantime, I gave the landlord a deposit of $250 that would cover the month of May. I should mention that I needed my mom's signature on the contract as well so I decided that when my mom signed, I would bring it to them and place my signature in front of them.

Tragedy struck (not really). The whole university system went on strike, duties were paralyzed and money I was expecting was not paid. Fortunately, my internship was still on and and thought I would use the money to pay for the apt. Around mid June I called the landlord and told her why I haven't gotten around and she said to not worry that she understands the situation and as soon as I got the money pay her for two months (June and July). Around late June, the strike was settled, but there would be a special fee of $800 starting January so I thought that it would be a bit too much to pay $800 in January, plus tuition, plus the housing, so I started searching for a more economical place.

Around late July, I decided to stay with my cousin and called the landlord (well, my mom did) to inform her that I would not be using the place after all. She told my mom not to worry, that she was going on a trip but that she would be contacting her the following week to refund the deposit.

Today my mom calls her to inquire about the deposit. The landlord had changed her mind after consulting her husband because "she understood that we had made a verbal agreement (because she thought I was a decent and honest young man, true to my word)" and that I owed them for two months but that she would retain the deposit and then I'd need to pay for just one month. After a bit of arguing, she then said to forget the whole thing, don't pay her nothing but that she would retain the deposit.

Things I must emphasize here:
1. The written agreement (ie. the contract) was never signed or handed to them by me so by all intentions, there is no written agreement signed.
2. I never even stepped or moved into the place, so I never even used the place.
3. She says I breached a verbal agreement, but then again so is she by telling us that she will refund the deposit and then say no.
4. While I do admit of stalling (because it's been two months since the strike ended and so far, the university has not paid my my money), the thing is that the deposit is a damage deposit. How can you retain a damage deposit when I didn't even use the place?

I thought this is a bit like the layaway process at your local retail store. I paid them a deposit in the interest to save my spot until I had enough money to move in and continue as if nothing had happened. So if during a layaway you decide to not continue, you are either given a full refund or charged a fee. Though the first was desirable, I expected the second one since I agree that it had caused an inconvenience.

So, what's your verdict on this case? Who's right and who's wrong? Should I receive my deposit, be charged something, or receive jacksquat?

Posted: Mon Aug 16, 2010 1:20 am

If you live in the United States you could always take her to small claims court. It's pretty inexpensive and if the judge rules in your favor you'd get your $250 plus the court costs.

Posted: Mon Aug 16, 2010 8:45 am

Verbal agreements are usually legally binding. And I didn't think that there was any legal obligation to repay deposits if the payer backs out.
I did once when someone found himself unable to buy my car, but only because I was having second thoughts about selling it. So the outcome wasn't a problem for me. The "buyer" seemed quite surprised. I'm too honest for my own good sometimes. Sad

Baiting Guru Joined: 03 Mar 2006 Posts: 7103 Location: Yes

Sounds to me like both of you were unclear as to what the purpose of the deposit was. Usually, in a landlord-tenant situation, the deposit is a reserve against damage or unpaid rent, and is returned (less any damages) at the end of the lease. I didn't hear you or your LL say that the deposit was a "place holder" just in case you decided to go through with renting the apt. Think of it from her perspective -- she lost the ability to advertise for two months as you told her you were moving in.

A verbal contract is nearly always enforceable -- it's just that written contracts are more easily proven as they are actually, you know in writing. Wink

I'd chalk this up to experience, frankly. You're getting away from the lease and are not out much.

Posted: Mon Aug 16, 2010 4:01 pm

Seems to me that you lost your deposit and may be liable for a prorated portion of the month of July.

Your only out in some states would be if you were under 18 and not an emancipated minor or as in this case the LL says things are cool.

Posted: Mon Aug 16, 2010 6:35 pm

I would say that the fact that you put down a deposit shows your intention to go ahead with the deal. The landlord at this stage then would have stopped looking for another tenant, and since you are now no longer taking the apartment, the landlord finds herself out of pocket and minus a tenant. I do not think you have much recourse, unfortunately.

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